JAMES RAYNOR Chief Executive Grosvenor Europe

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1 Stories from Europe

2 01 It is Grosvenor Europe s strategy to consider our property holdings in perpetuity and to use three centuries of experience to understand how an asset can always remain relevant to its local environment. So, we take a holistic view of our assets: they are more than just bricks and mortar, steel and glass. They are not defined by their walls, but rather by the lasting positive contribution they make to the environment, economy and society. Grosvenor s Living cities philosophy is a vital component in this approach. It informs where we are active, how we invest and how we develop and manage our existing and future investments. It guides us to develop and manage buildings and places that deliver benefits well into the future. This guide explains how we interpret and implement our Living cities philosophy in Europe, and provides practical examples of our approach in practice. JAMES RAYNOR Chief Executive Grosvenor Europe

3 02 03 Living cities For the last 340 years, Grosvenor has sought to earn a reputation for investing in, developing and managing world-class real estate, demonstrating a deep rooted sense of responsibility and commitment to managing property for the longterm benefit of current and future stakeholders. We apply rigorous financial discipline to achieve commercial success, but we do so with the aim of making a lasting contribution to the economic, social and environmental wellbeing of the urban communities we are part of. Simply put, we want our activity, and our assets and places, to contribute to the enduring success of the cities in which we are active, the realisation upon which our own success also depends. It s what we call our Living cities philosophy, which guides our activities to help foster thriving places which reflect the spirit of individual cities, ultimately contributing to their enduring success.

4 04 05 During the last three centuries Grosvenor has weathered several economic cycles, the industrial revolution, technological change and globalisation. The Global Challenge Now, the world we live in is transforming more rapidly than ever. Greater strains are emerging on basic services such as education and health, and on our resources such as food, energy and water. Cities are at the centre of this transformation and are the source of many of these challenges. We believe we understand what makes our real estate resilient to these changes. We also believe that through our real estate activities, we can help neighbourhoods and cities evolve in ways that are socially, economically and environmentally sustainable, ultimately, helping to contribute to their enduring success.

5 06 07 Living cities in Europe Stockholm Grosvenor Europe is driven by the desire to be innovative, distinctive and responsible, and to develop and manage buildings and places that are both flexible and of high quality, in order to deliver long lasting and wide-ranging commercial and social benefit. Liverpool We use Grosvenor s centuries of international experience in conjunction with our local knowledge to consider how our assets have changed over time, what has kept them significant today, and what is going to keep them relevant. Living cities provides us with the inspiration to create successful real estate assets within our European cities; properties that are flexible, purposeful and in which people want to spend their time now and in the future. Paris Lyon Milan Madrid

6 08 09 Driving Success To measure the fundamental success of an asset, whether a new office tower or a city centre shopping district, we have developed a set of eight Living cities attributes. These eight attributes help to determine the cities in which Grosvenor Europe is active, allowing us to ensure we are active in places with long-term potential. Our focus cities, Paris, Madrid, Stockholm, Milan, Lyon and Liverpool are located in mature economies with strong governance, transport and infrastructure. While our influence at this level can be limited to our power to guide policymakers and governments, we can support the establishment and bettering of these attributes by building strong stakeholder relationships to promote positive change. The attributes also influence our core business activities in our cities, guiding investment, development and management decisions. By adopting these attributes and focusing on the quality of design, availability and attractiveness of public space and community integration, we can directly impact the practical function of our assets, as well as the way they interact with their surroundings, ensuring we are making buildings and places better for current and future generations.

7 10 11 Three Channels These attributes can be grouped three ways economic, community and environmental and help guide us to create flexible, well-designed and sustainable properties and places that create a welcoming and vibrant urban environment for the communities where we are active. 1. Economic 2. Community 3. Environment A fundamental driver of commercial real estate success is how fit for purpose an asset is. Does it encourage time to be spent in the building or place, and is the design flexible enough to be adapted in order to have continual impact over time? Living cities focuses on attributes above and beyond sustainability, to tap into what makes a building a welcoming place to be and a place people want to return to time and again. It emphasises quality of design, availability and attractiveness of public space and community integration, which means that Grosvenor Europe assets not only serve a practical function, but also enhance their surrounding environment, ensuring their resilience as an integral part of the local community. Of course, Grosvenor Europe s success as a business is directly related to the success of our assets, and therefore to the social and economic well being of the communities we are part of. Our reputation is also dependent on the quality of the contribution we make to these communities, helping us to fulfil both a commercial and social purpose. Property is above all somewhere for people to live, to work, to spend their time and to connect with each other. It is an enabler of all the things that society needs to continue to progress and is therefore much more than a financial asset. Property is also adaptive, creative and forward looking and an opportunity to be part of the solution to various social problems. Living cities guides us to focus on those elements that will improve places and contribute to people s well being. This might include supporting local community groups, charities or providing new facilities to sustain growing populations. We also recognise that the success of our business is driven by all of our people. The Living cities philosophy gives each member of staff, whether they work directly with assets or not, a way in which to make a difference. This could be through working with our local charity partners, participating in volunteering events or contributing to energy saving initiatives in the office. The impact that the real estate sector can have on slowing down the long term effects of man made climate change is significant, as most estimates put the contribution of global real estate to total carbon emissions at around 40%. The Living cities philosophy recognises this contribution and guides Grosvenor Europe s efforts to minimise its impact on climate change, in our own offices and across our portfolio of assets. For example, we aim for our buildings to adapt to the newest technologies, ensuring our energy, water and waste management is as efficient as possible.

8 12 13 Our Stories We put Living cities at the heart of our business. We have a desire to consistently improve our assets so we establish challenging targets to ensure that we always try to leave buildings and places in better shape than when we acquired them, whether from a design, environmental or commercial perspective. We measure success on how we perform against the eight Living cities attributes. Here are some of our success stories.

9 14 15 Sustainable Design - JORGE JUAN 53, MADRID, SPAIN - The garden at Jorge Juan 53 is important to the sustainability of the urban environment and to creating a vibrant place. It links perfectly well with Grosvenor s Living cities philosophy. JESÚS MORAIME, LANDSCAPE ARCHITECT Jorge Juan 53 is located in the elegant district of Salamanca in central Madrid, close to the Retiro Park, the green heart of Madrid. Grosvenor Europe will deliver six high-end residential units, parking and a 650 sq m private garden for exclusive use by residents. The design of Jorge Juan 53, by international studio Ortiz.Leon Architects, mixes modern styles, high quality materials and flexible floor plans to reflect the changing nature of the Salamanca neighbourhood. With a strong focus on sustainability, the design ensures durability of the product and will, like the garden, promote well being. The project is working towards a BREEAM rating, uncommon in the Spanish residential market, as well as a ratio of 1:1 electric to non-electric car parking spaces in the underground garage. The aerothermal heating and cooling system can achieve up to 30% in savings compared to a standard heating system. The Mediterranean garden is rare for a residential scheme in Madrid, creating a comfortable and peaceful retreat in the middle of a busy city. Spanish landscape architect, Jesús Moraime, has designed the garden exclusively for Grosvenor Europe. His intention, through selecting a range of native seasonal Mediterranean plant species that will reflect the changing seasons, will fuel integration between the residential development, the city of Madrid and beyond.

10 16 17 Transforming Places - MODESTO LAFUENTE 26, MADRID, SPAIN - Grosvenor Europe will convert a dated 1970s office building on calle de Modesto Lafuente, in the sought after Rios Rosas area of the desirable Chamberí district of Madrid. The vacant 2,000 sq m building does not currently reflect the spirit or architectural design of the locality, nor does it align with the need for additional family housing in this neighbourhood. Grosvenor Europe is working with esteemed architectural practice Estudio Lamela to create a residential scheme of 12 apartments of between two and four bedrooms including private terraces, with attractive amenities such as a gym and rooftop terrace. The principal design driver of the project is the need to provide a high quality and attractive façade to improve the current streetscape and add to the vibrancy. We are driven by a desire to make things better, so we are transforming an unattractive and unused building into one that not only reflects both the modern vibrancy and heritage of the district, but one that meets the demands of a growing city. FÁTIMA SÁEZ DEL CANO Director, Spain, Grosvenor Europe

11 18 19 Creativity Driving Change - ROLLERS & BOWLERS, HANINGE CENTRUM, STOCKHOLM, SWEDEN - The transformation undertaken by Grosvenor in Haninge is making such a difference to the local community. People of all ages now have somewhere to go and spend their time. MICHAEL ISSA Manager, Rollers & Bowlers In 2016, Grosvenor Europe welcomed dining and leisure operator, Rollers & Bowlers, to Haninge Centrum in southern Stockholm. Rollers & Bowlers is a unique attraction and the first combined sports bar and amusement centre south of Stockholm. By reconfiguring existing office and retail space, we are transforming shopping centres into destinations of choice. Expanding a shopping centre offering from pure retail to incorporate food and leisure not only increases footfall, occupier demand and performance, but contributes to the growing vibrancy of the location.

12 20 21 The Urban Renaissance - LIVERPOOL ONE, LIVERPOOL, UK - Liverpool ONE, a 250,000 sq m Grosvenor development in central Liverpool which we continue to manage, comprises over 165 shops, more than 500 apartments, two hotels, 25 restaurants, a 14-screen Odeon cinema, four office buildings, a revitalised two-hectare park, 3,000 car parking spaces and a public transport interchange. Since opening in 2008, Liverpool ONE has acted as a catalyst for further regeneration projects in the city and has helped transform Liverpool s economic prospects. Its leisure facilities and award-winning Chavasse Park are used regularly for community events. The Liverpool ONE Foundation works with over 40 local groups and charities in Merseyside, contributing 300,000 a year from an endowment of over 1.5m (with help from The Westminster Foundation). The Foundation also works in partnership with local schools, colleges and universities to develop educational resources for use while visiting the shopping centre. It is credited with having a long-term impact and creating a lasting legacy in the city.

13 22 23 Our Approach to Sustainability 3% reduction Long-term investment in solar panels and new infrastructure such as LED lighting and escalator EcoDrives, has reduced Liverpool ONE s consumption of grid generated electricity by 225,000 kwh, equating to a cost saving of 22,000 in Like-for-like energy consumption (2015: 5% reduction) 6% reduction Like-for-like water consumption (2015: 2% reduction) Grosvenor Europe has the same high standards of sustainability integrated into their investment processes as Bouwinvest, so they are a natural partner for us in our international real estate investment strategies. We aim to invest in sustainable real estate and use GRESB to measure the ESG performance of funds. We support the ambition of Grosvenor to improve the GRESB score of their funds annually. CATHELIJNE MARTIN Director European Investments, Bouwinvest As a long-term steward of the built environment, Grosvenor Europe understands the importance of promoting sustainable design, management and innovation across our portfolio. Our approach starts at the very top, with a clear governance philosophy that promotes corporate social responsibility. We also actively share our performance against sustainability measures, demonstrating a public commitment to transparency and accountability. Grosvenor Europe was an early participant in the annual Global Real Estate Sustainability Benchmark (GRESB) which now includes over $US 3.7tn of assets across the world. Grosvenor Europe has five Green Star vehicles and has improved our overall performance by 58% since our first submission in In addition we are signatories to the global UN Principles for Responsible Investment. This commitment to sustainability feeds right through to implementation at an asset level, with a constant emphasis placed on improving performance across our portfolio. We set ambitious targets and continue to reduce our water and energy consumption and CO2 emissions year on year. We also look for opportunities to implement renewable strategies such as solar PVs, which we have installed in Liverpool ONE. In Burlöv Centrum, Sweden, Grosvenor Europe installed two bee hives on the roof of the centre, producing 100 kilograms of honey in one summer. This led to the pollination of approximately 250 million flowers and the support of local bee populations.

14 24 25 Our Communities Grosvenor Europe understands that our assets are only as successful as the communities in which we operate. We are active in a broad range of locations and we understand and adapt to the needs of the communities in each case. We understand that as an asset owner, we are in a unique position to enable change in our communities and support local groups which are seeking to address the specific needs of their citizens. This extends through to our engagement with local organisations, from municipalities to local charities such as Mitt 127. Mitt 127 means My 127, referencing the 127 area code of Skärholmen, a district in southern Stockholm with a high concentration of immigrants from all over the world. The charity organises festivals, educational programs for young people and raises awareness of political issues relevant to the area. Through these initiatives, Mitt 127 succeeded in creating a local community where everyone is welcome. 127 Festival is the most successful initiative under the Mitt 127 umbrella. For six weeks each summer, the charity creates a schedule of activity to keep the local children entertained and educated during the school holidays. Not only did it attract over 30,000 people in 2017, the festival is also part-organised by local role models aged between 20 and 28, who can develop important work experience skills. For the founder, Aseffa Hailu, if young people are actively engaged in their local environment, they will increase their dedication to and responsibility for its legacy. Grosvenor has stretched out a hand to the young and really taken care of the driving forces found here. Partly through the project SKHLM Stars where they had a number of young people working together with the centre management, and partly by sponsoring the 127 festival, and also by communicating contacts that in many cases led to work inside in the stores in the shopping centre. ASEFFA HAILU Founder, Mitt 127

15 26 Eight Attributes Climate resilient Connected Economically resilient Good governance Resilient to both long-term climate change and extreme weather events. Prepared for long term changes Prepared for extreme events Well connected internally, regionally and internationally in terms of transport and communications. High quality city transport network High quality communications networks High quality transport to other places Robust infrastructure Resilient to rapid changes in the economic system. Diverse economy Innovative and entrepreneurial Strong knowledge and diverse skills base Long-term investment value Good governance including clear policies, high levels of community participation, strong institutional capacity, a clear vision and strong leadership. Clear policies High levels of community participation Strong institutional capacity Vision and leadership Healthy environment High quality place Strong community Sustainable resources Environments that support healthy ecological systems. Clean air Clean land and soil Clean water Comfortable microclimate Healthy ecology Low greenhouse gas emissions Low noise and light pollution Prepared for extreme events A physical environment that enriches people s lives and a distinctive sense of place of which its citizens can be proud. Accessible for all Culturally rich Enriching design Great public space Conserved heritage High performance building stock Communities which are vibrant, healthy, safe, tolerant, diverse and affordable. Accessible nature and tranquillity Affordable living Education and empowerment Happy citizens Healthy lifestyles Inclusive and equitable Opportunity for employment Safe and secure Sustainable management of natural resources to meet long-term needs. Resources are conserved and responsibly sourced. Sustainable ecosystem services Sustainable energy Sustainable food Sustainable materials Sustainable use of land Sustainable water europe@grosvenor.com

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